Question

**Capital Budgeting Methods**

Project S has a cost of $9,000 and is expected to produce benefits (cash flows) of $2,700 per year for 5 years. Project L costs $26,000 and is expected to produce cash flows of $7,100 per year for 5 years.

Calculate the two projects' NPVs, assuming a cost of capital of 10%. Do not round intermediate calculations. Round your answers to the nearest cent.

Project S: $

Project L: $

Which project would be selected, assuming they are mutually exclusive?

Based on the NPV values, -Select-Project SProject LItem 3 would be selected.

Calculate the two projects' IRRs. Do not round intermediate calculations. Round your answers to two decimal places.

Project S: %

Project L: %

Which project would be selected, assuming they are mutually exclusive?

Based on the IRR values, -Select-Project SProject LItem 6 would be selected.

Calculate the two projects' MIRRs, assuming a cost of capital of 10%. Do not round intermediate calculations. Round your answers to two decimal places.

Project S: %

Project L: %

Which project would be selected, assuming they are mutually exclusive?

Based on the MIRR values, -Select-Project SProject LItem 9 would be selected.

Calculate the two projects' PIs, assuming a cost of capital of 10%. Do not round intermediate calculations. Round your answers to three decimal places.

Project S:

Project L:

Which project would be selected, assuming they are mutually exclusive?

Based on the PI values, -Select-Project SProject LItem 12 would be selected.

Which project should actually be selected?

-Select-Project SProject LItem 13 should actually be selected.

Answer #1

Working:-

Capital Budgeting Methods
Project S has a cost of $9,000 and is expected to produce
benefits (cash flows) of $2,700 per year for 5 years. Project L
costs $26,000 and is expected to produce cash flows of $7,100 per
year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of
10%. Do not round intermediate calculations. Round your answers to
the nearest cent.
Project S: $
Project L: $
Which project would be selected, assuming they...

Capital Budgeting Methods
Project S has a cost of $10,000 and is expected to produce
benefits (cash flows) of $3,000 per year for 5 years. Project L
costs $25,000 and is expected to produce cash flows of $7,400 per
year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of
12%. Do not round intermediate calculations. Round your answers to
the nearest cent.
Project S: $
Project L: $
Which project would be selected, assuming they...

Project S has a cost of $9,000 and is expected to produce
benefits (cash flows) of $2,700 per year for 5 years. Project L
costs $26,000 and is expected to produce cash flows of $7,100 per
year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of
10%. Do not round intermediate calculations. Round your answers to
the nearest cent.
Project S: $
Project L: $
Which project would be selected, assuming they are mutually
exclusive?...

Capital
Budgeting Methods
Project S has a cost
of $10,000 and is expected to produce benefits (cash flows) of
$3,000 per year for 5 years. Project L costs $25,000 and is
expected to produce cash flows of $7,400 per year for 5 years.
Calculate the two
projects' NPVs, assuming a cost of capital of 12%. Do not round
intermediate calculations. Round your answers to the nearest
cent.
Project S:
$
Project L:
$
Which project would be
selected, assuming they...

Project S has a cost of $11,000 and is expected to produce
benefits (cash flows) of $3,400 per year for 5 years. Project L
costs $23,000 and is expected to produce cash flows of $6,900 per
year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of
14%. Do not round intermediate calculations. Round your answers to
the nearest cent.
Project S: $
Project L: $
Which project would be selected, assuming they are mutually
exclusive?...

Project S has a cost of $10,000 and is expected to produce
benefits (cash flows) of $3,500 per year for 5 years. Project L
costs $25,000 and is expected to produce cash flows of $8,000 per
year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of
14%. Do not round intermediate calculations. Round your answers to
the nearest cent.
Project S: $
Project L: $
Which project would be selected, assuming they are mutually
exclusive?...

Project S has a cost of $10,000 and is expected to produce
benefits (cash flows) of $3,500 per year for 5 years. Project L
costs $25,000 and is expected to produce cash flows of $8,000 per
year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of
14%. Do not round intermediate calculations. Round your answers to
the nearest cent.
Project S: $
Project L: $
Which project would be selected, assuming they are mutually
exclusive?...

Project S has a cost of $9,000 and is expected to produce
benefits (cash flows) of $2,700 per year for 5 years. Project L
costs $26,000 and is expected to produce cash flows of $7,100 per
year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of
10%. Round your answers to the nearest cent.
Project S
$ ________
Project L
$ ________
Which project would be selected, assuming they are mutually
exclusive?
_________________...

Project S has a cost of $10,000 and is expected to produce
benefits (cash flows) of $3,500 per year for 5 years. Project L
costs $25,000 and is expected to produce cash flows of $8,000 per
year for 5 years.
Calculate the two projects' NPVs, assuming a cost of capital of
14%. Round your answers to the nearest cent.
Project S
$
Project L
$
Which project would be selected, assuming they are mutually
exclusive?
Calculate the two projects' IRRs....

Project S has a cost of $10,000 and is expected to produce
benefits (cash flows) of $3,000 per year for 5 years. Project L
costs $25,000 and is expected to produce cash flows of $7,400 per
year for 5 years. Calculate the two projects' NPVs (in dollars),
assuming the cost of capital of 10%. (Round your answers to the
nearest cent.)
S$
L$
Calculate the two projects' IRRs (as percents), assuming the
cost of capital of 10%. (Round your answers...

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